Welcome back to another blog by AspireFX. We’ll be taking a look at how GBPAUD has been moving steadily to the downside as confidence returns to the Australian dollar.
Looking at the weekly time frame we can see that the support levels mentioned in the previous GBPAUD article has been completely smashed. There was some indecision with a doji forming just above 1.95000. Price went on to break through that level and tested the next major support at 1.9000 where we had a clean rejection, printing a bearish hammer. Since then, price has continued to move steadily to the downside breaking structure from the week of May 18. Looking left on our charts for the next possible point of support for this pair, it’s evident that 1.8000 will be a major level to consider.
Giving us a clearer picture of how price has been moving to the downside is the 4 hour chart above. We have been trending very nicely to the downside finding some support at 1.85000 where price hovered just above for about a week until we finally broke that support, and continued to make fresh lows. Looking at the highlighted region, we had two drives back into the highlighted region where we can see there was two clean rejections and we started moving towards the next crucial key level at 1.8000.
Looking at the 1 hour chart we can see we found support just above 1.8000 forming a lower high shown by the highlighted region. Since the Westpac Consumer sentiment came out lower than last months data as well as the Australian Home loans data coming out negative, we had a push to the upside. Another fundamental aspect adding to the movement to the upside was announcement by the UK saying they are planning to sell $3 billion of gilt on June 16. The initial reaction for the pound is positive because money will be pumped into their economy but the long term affect will be negative as it proves they are struggling to cover their own debts because of the huge financial knock taken during this global pandemic. We have just reversed off of the 61.8% Fibonacci level, proving the strength of the Aussie dollar.
There are numerous fundamentals coming into play this week. The most noteable being the UK’s GDP, Industrial Production data as well as the Trade balance for April, all of which are coming out June 12. Consider these reports carefully and as always trade safe. Subscribe for instant access to our latest blogs.